Executive Summary
Science Applications International Corporation (SAIC) reported QQ4 2025 results with revenue of $1.838 billion and a net income of $98 million, delivering EPS of $2.02 (diluted $2.00). The quarter showed a modest year-over-year revenue lift in gross margin, but a meaningful sequential revenue pull driven by seasonality and award timing. Gross margin expanded modestly to 12.6% from prior-year levels, while operating margin stood at 7.5% and net margin at 5.3%, illustrating stable profitability amid a leverage-heavy balance sheet. Free cash flow generation remained solid at $100 million for the quarter, supported by $115 million of operating cash flow and controlled capital expenditure of $15 million. However, liquidity indicators were constrained: cash and cash equivalents ended the period at $56 million, total debt stood at $2.39 billion, and the current ratio was 0.82, signaling a working-capitalsensitized balance sheet despite significant non-cash assets (goodwill and intangibles totaling ~$3.6 billion).
From a longer-term perspective, SAIC continues to benefit from a defensible, government-centric services portfolio—encompassing IT modernization, cloud migration, engineering, and security—supported by a broad U.S. federal client base (Army, Air Force, Navy, DHS, NASA, DoJ, etc.). The results imply a business delivering stable cash generation with opportunities to improve margins through cost discipline and mix optimization, though near-term deleveraging remains a key consideration given elevated long-term debt. The company’s earnings trajectory appears consistent with peers in government IT services, with earnings growth driven more by efficiency gains and contract phasing than by aggressive top-line expansion in the current period.
Key Performance Indicators
Key Insights
Revenue: $1.838B; YoY: -0.49%; QoQ: -6.98%
Gross Profit: $232M; YoY: +8.92%; QoQ: -2.11%
Operating Income: $138M; YoY: +5.34%; QoQ: -13.75%
Net Income: $98M; YoY: +27.27%; QoQ: -7.55%
EPS: $2.02 (GAAP); Diluted: $2.00; YoY: +35.57%; QoQ: -6.05%
Gross Margin: 12.62%; Operating Margin: 7.51%; Net Margin: 5.33%
EBITDA: $172M; EBITDA Margin: 9.36%
Operating Cash Flow: $115M; Free Cash Flow: $100M
Cash at End of Period: $64M; Total Debt: $2.393B; Net Debt: $2.337B
Current Ratio: 0.82; Quick Ratio: 0....
Financial Highlights
Revenue: $1.838B; YoY: -0.49%; QoQ: -6.98%
Gross Profit: $232M; YoY: +8.92%; QoQ: -2.11%
Operating Income: $138M; YoY: +5.34%; QoQ: -13.75%
Net Income: $98M; YoY: +27.27%; QoQ: -7.55%
EPS: $2.02 (GAAP); Diluted: $2.00; YoY: +35.57%; QoQ: -6.05%
Gross Margin: 12.62%; Operating Margin: 7.51%; Net Margin: 5.33%
EBITDA: $172M; EBITDA Margin: 9.36%
Operating Cash Flow: $115M; Free Cash Flow: $100M
Cash at End of Period: $64M; Total Debt: $2.393B; Net Debt: $2.337B
Current Ratio: 0.82; Quick Ratio: 0.82; Cash Conversion Cycle: 13.61 days
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.84B |
-0.49% |
-6.98% |
| Gross Profit |
232.00M |
8.92% |
-2.11% |
| Operating Income |
138.00M |
5.34% |
-13.75% |
| Net Income |
98.00M |
27.27% |
-7.55% |
| EPS |
2.02 |
35.57% |
-6.05% |
Key Financial Ratios
operatingProfitMargin
7.73%
operatingCashFlowPerShare
$2.36
freeCashFlowPerShare
$2.05
dividendPayoutRatio
18.4%
Management Commentary
Transcript availability: Not provided in the data. No earnings call transcript was supplied for QQ4 2025, so management commentary and verbatim quotes from an earnings call are unavailable in this dataset.
Transcript not provided.
— N/A
Transcript not provided.
— N/A
Forward Guidance
No explicit forward guidance was published in the provided data. Given the macro backdrop of US defense and civilian agency IT modernization, the near-term trajectory should hinge on: (1) stability or growth in federal IT budgets and contract awards, (2) execution of ongoing modernization and cloud migration programs, and (3) ongoing cost discipline to support margin resilience. Potential scenarios:
- Base case: Moderate revenue stability with measured margin improvement as automation and productivity gains offset wage and supply dynamics.
- Upside: Larger-than-expected award activity or favorable mix (more high-margin cloud/Managed Services work) could lift gross and operating margins, driving higher FCF and stronger deleveraging.
- Watchcases: Delays or funding variability in federal programs could pressure revenue cadence and working capital, keeping liquidity management a priority.
Key factors for investors to monitor include government budget trends, contract awards and renewals, utilization rates, and progress on deleveraging vs. acquisitions or capex commitments.